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The Rocketplane companies file for bankruptcy after closing the Oklahoma City headquarters.

NewsOK.com Aug 10, 2010
JENNIFER PALMER

The final destination for Rocketplane, the aerospace company that once promised Oklahoma the moon, may be bankruptcy court.

The final destination for Rocketplane, the aerospace company that once promised Oklahoma the moon, may be bankruptcy court.

Last month, Rocketplane filed for Chapter 7 bankruptcy in Wisconsin, where it relocated after closing its Oklahoma City headquarters at Will Rogers World Airport and relinquishing its hangar at the Oklahoma Spaceport in Burns Flat in 2009.

CEO George French filed personally as well as for each of three business entities: Rocketplane, Rocketplane Global and Rocketplane Kistler. Debts for each were listed at about $8.2 million, $3.7 million, $2.6 million and $7.4 million, respectively.

The company's assets include some structural components and the patented intellectual property from the company's work designing an aircraft capable of transporting tourists into space. Those design patents may now be sold as part of the bankruptcy liquidation.

When contacted by phone, French said Rocketplane reached the "preliminary design review" stage during its years in Oklahoma.

The company started with investments that included an $18 million state tax credit, received in 2003 and later sold to Bank of Oklahoma. That credit, the Space Transportation Vehicle Provider Credit, expired at the end of the year, the Oklahoma Tax Commission said.

Rocketplane received private investments as well.

"We came there, and put all our money on the table. We spent it all," French said.

Creditors listed in the filing include individuals, financial institutions and other businesses throughout the U.S. and several other countries.

Local debts include:

  • $1,464.64 to Four Points by Sheraton hotel in Oklahoma City.
  • $447.60 to Thrifty Car Rental in Oklahoma City.
  • $43,780.45 to Tulsa accounting firm Woodrum Kemendo Tate & Westemeir.
  • $47,981.65 to Oklahoma City accountants Cole & Reed.
  • $62,553.44 to former program manager David Faulkner.
  • $897.26 to Oklahoma Office Systems.
  • $260 to the Petroleum Club of Oklahoma City.

French even lists himself as a creditor in one filing, saying he's owed a deferred salary of more than $735,500.

Where did the money go?

Former astronaut John Herrington, who was hired by Rocketplane in 2005, said the rocket's first design revolved around modifying the body of a Learjet. But the engineering team decided the best route was to build the aircraft from the ground up.

Dollars were spent on jet engines to power the vehicle and on a contract with a rocket engine manufacturer to build a liquid oxygen/kerosene engine, Herrington said.

Salaries of the company's staff — which in 2006 numbered about 50 — also ate into the funding. French has said the $18 million was spent on "employees' 200,000 hours of design work."

Fresh investments began drying up in 2007, including the company's primary funding source, and it struggled to stay afloat.

"If we had successfully acquired the capital that we needed, we would have grown into a major player in the commercial space program," Herrington said.

French said the company determined that to be viable, it would need multiple vehicles at a cost of $100 million each. He remains hopeful that Rocketplane will emerge from bankruptcy and return to Oklahoma.

"I hope that something very good will come out of this process," he said. "We believe Oklahoma was the right place and we still believe the Oklahoma Spaceport is the right place. It's the best in the world — that's why we chose it."

Herrington expressed regret at leaving NASA to work for Rocketplane: "I gave up a remarkable career at NASA to pursue something that I felt was exciting and possible. I never would have left NASA had I felt otherwise. I valued the engineers and administrative staff and wholeheartedly believed they were trying their very best to make the company successful."

What about the spaceport?

The state Legislature narrowly agreed in February to continue funding the Oklahoma Space Industry Development Authority, which runs the Spaceport in Burns Flat.

Like most state agencies, the agency received a 7 percent cut; it will receive $424,289 this fiscal year, which began July.

At the time, Rep. Todd Russ said if nothing substantial happens at the Spaceport in the next three years, he would talk with legislators about possibly closing it.

Agency Director Bill Khourie said it has reduced its staff from five to three but is still operating. There are several space companies other than Rocketplane that could potentially fly from the Spaceport in the near future, he said.

Rocketplane global timeline provided by Tulsa World

2001: California-based Rocketplane is one of seven companies nationwide that signs a "gentleman's agreement" to come to Oklahoma's Spaceport under a new law allowing tax credits for companies investing in Oklahoma's space industry.

2003: Rocketplane qualifies for an $18 million tax credit in Oklahoma.

2004: Rocketplane sells the tax credits and uses the proceeds to set up shop and hire employees. It also releases specifications of its XP spacecraft and says it can take tourists into space by 2006 for just under $100,000 each.

2005: Rocketplane pushes launch date to 2007 and raises the ticket price to $200,000. Former NASA astronaut John Herrington joins the staff.

2006: Rocketplane merges with Kistler Aerospace Corp. and receives a $207 million NASA contract to develop a rocket-powered vehicle to reach orbital space. The Oklahoma Spaceport receives approval from the Federal Aviation Administration.

2007: NASA drops its deal with Rocketplane after the company fails to meet a deadline.

2008: Herrington resigns as Rocketplane pilot.

2009: Rocketplane abandons its office at Will Rogers World Airport and relocates to Wisconsin.

2010: Rocketplane files for bankruptcy.

What about the Spaceport?

The Legislature narrowly agreed in February to continue funding the Oklahoma Space Industry Development Authority, which runs the Spaceport in Burns Flat.

Like most state agencies, OSIDA received a 7 percent cut; it will receive $424,289 this fiscal year, which began July. 1

State Rep. Todd Russ, R-Cordell, has said if nothing substantial happens at the spaceport in the next three years, he would talk with legislators about possibly closing it.

OSIDA Director Bill Khourie said the agency has reduced its staff from five to three but is still operating. There are several space companies other than Rocketplane that could potentially fly from the Spaceport in the near future, he said.

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